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Amazon bails on Long Island City

After all the hype, Amazon will no longer build their HQ2 in LIC

LIC loses out on Amazon (Credit:Bloomberg)

Amazon has canceled its plans to build a corporate campus in Long Island City after facing fierce backlash from lawmakers, progressive activists, and union leaders. The company made the surprising decision after growing increasingly concerned that the backlash was tarnishing its image beyond the city, according to the NYTimes.

Worth Noting: Both the Mayor and Governor reassured Amazon executives that despite the vocal criticism, the deal they had negotiated would have been approved… Amazon’s plans to open a second headquarters in northern Virginia are proceeding and have received state approvals. 

Lose the battle, win the war: As the deal started to turn into a PR nightmare, it had become clear that this headache was not going away. In hindsight, Amazon failed to persuade local officials to support the project and simply negotiated with the Mayor and Governor. Moreover, Amazon did a poor job of preemptively selling the economic benefits of their move.

Prime Mover… Since November, 135 contracts for condos were reportedly signed in LIC, compared with 48 contracts during the same period last year, according to the WSJ. Lawyers will be busy!

A few notable real estate repercussions in LIC: 

1) Savanna will need to tenant 1 million SF of space at One Court Square. Citigroup is vacating their space in 2020.

2) Plaxall Realty will miss out on the windfall from the proposed sale of its Anable Basin site.

3) Absorption will obviously be slower for new rentals and especially condo projects.

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